Integrity in Corporate Governance

Meaning of ‘integrity’

Integrity is generally understood to describe a person of high moral virtue. A person of integrity is one who observes a steadfast adherence to a strict moral or ethical code notwithstanding any other pressures on him or her to act otherwise.

In professional life, integrity describes the personal ethical position of the highest standards of professionalism and probity.

It is an underlying and underpinning principle of corporate governance and it is required that all those representing shareholder interests in agency relationships both possess and exercise absolute integrity at all times. To fail to do so is a breach of the agency trust relationship.


Importance of integrity in corporate governance

Integrity is important in corporate governance for several reasons:

1. As corporate governance cannot cover every situation, maintenance of good corporate governance will sometimes depend on judgement not backed by codes. In these instances integrity is particularly important.

2. As integrity is partly about proper dealing in relationships, it also underpins the principles of fair and equitable dealing with shareholders in corporate governance, particularly in relation to directors exercising an agency relationship in respect of shareholders.

3. Good corporate governance is also about maintaining market confidence that the company is being run honestly, firm belief that directors have integrity will promote confidence in the company.



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